Home Office

The six-month review of the implementation of the Exchange of Notes on Beneficial Ownership between the United Kingdom, Crown Dependencies and relevant Overseas Territories

Mr Ben Wallace: I, along with my rt hon Friend Sir Alan Duncan, Minister of State for Europe and the Americas, wish to make a statement on the six-month review of the implementation of the Exchange of Notes on Beneficial Ownership between the United Kingdom, Crown Dependencies and Relevant Overseas Territories. In 2016 a commitment was made between the UK, six of the Overseas Territories (OTs), and all of the Crown Dependencies (CDs), to enhance the effectiveness of long-standing law enforcement cooperation with respect to the sharing of beneficial ownership information for corporate and legal entities incorporated in the respective jurisdictions. The arrangements for this are set out in the ‘Exchange of Notes’ (EoNs) and Technical Protocol, which includes a commitment that: “The Participants will review together the operation of these arrangements in consultation with law enforcement agencies six months after the coming into force of these arrangements, and thereafter annually.”  Officials from the Home Office and Foreign and Commonwealth Office, and representatives from Guernsey and Alderney, Jersey and The Isle of Man; and the British Virgin Islands, Cayman Islands, Bermuda, Gibraltar, Anguilla and Turks and Caicos Islands have carried out this first review of the EoN arrangements. During the course of this review, the CDs and OTs have reiterated to the UK authorities their commitment to the EoNs, as demonstrated by their positive and proactive approach to implementation and engagement in the review process. The government committed to complete this review by the end of March. Sir Alan Duncan (for the Overseas Territories) and I (for the Crown Dependencies) are pleased to provide the following key findings of the review and recommendations for the future of these arrangements. The findings and recommendations of this review are based on material supplied by, and discussions with, all of the jurisdictions involved in the review process. The position varies across these different jurisdictions, and not all of the findings and recommendations of this review apply to all jurisdictions. Of course, where a jurisdiction already complies with the points covered by a particular finding or recommendation, it should continue to do so. Key findings The EoN arrangements have, since their coming into effect in July 2017, provided law enforcement officers with enhanced access to company beneficial ownership information, as originally envisaged in 2016, and are supporting ongoing criminal investigations.Under the terms of the arrangements, this information is available to UK law enforcement within 24 hours, one hour if the request for information is notified as ‘urgent’, or such other time period as may be agreed. Information is available on a 24/7 basis.As of 9 February 2018, the EoN arrangements have been used over 70 times to provide enhanced law enforcement access to beneficial ownership data. This information has been used to enhance intelligence leads and investigations on illicit finance.The CDs, Bermuda, Gibraltar and the Turks and Caicos Islands (TCI) all have central registers to hold the required information. Jersey’s is already fully populated (it has had a private register since 1989), as are the Guernsey and Alderney registers. The Isle of Man’s register is nearing completion (81%), in accordance with the agreed timeframe for full population by 30th June 2018. Bermuda has had a central register for over 70 years, and its new database is nearly 100% populated.  Gibraltar expects its register to be fully populated by 30 June 2018, following a transition period. TCI, which was severely affected by hurricanes Maria and Irma, brought its enabling legislation into force on 1 February 2018. It anticipates that its register will be fully populated by December 2018, following a transition period.“Similarly effective arrangements” (as permitted by the EoNs) are in place in British Virgin Islands (BVI) and the Cayman Islands. BVI, which was also severely affected by the hurricanes, has now attained around 80% population of its system. The Cayman Islands expect their beneficial ownership system to be fully populated by 30 June 2018, following a transition period provided for by their legislation. The UK is finalising with Anguilla a Memorandum of Understanding on the terms for provision of UK support for the establishment of Anguilla’s beneficial ownership system. This was delayed due to the impact of Hurricane Irma. The UK has already provided drafting assistance for underpinning legislation, which will be introduced at the Anguilla House of Assembly in due course.The majority of requests thus far have been made by the National Crime Agency (NCA) and Serious Fraud Office (SFO). Other UK law enforcement authorities have also used the EoNs.As could be expected of new arrangements and systems, teething issues arose initially. This review makes a number of recommendations, building upon efforts already made to address these issues, which will be taken forward where appropriate and reported on at the next review. Recommendations This review has made a number of recommendations that have been agreed by all parties concerned, including that:  All participants should continue to participate in these reviews, maintaining a focus on enhancing law enforcement cooperation. Jurisdictions should continue to monitor their systems with a view to enhancing the accuracy of the data they hold. All participants to the EoNs should update their contact details as soon as practically possible, including out of hours contact details when these change, so that these can be disseminated appropriately. All jurisdictions should consider whether they may be able to adopt best practice on intelligence sharing e.g. request form templates. The standardised request form should be amended to include a tick box to indicate 1 hour or 24 hour timeframes. Participants should ensure that their registers are fully populated by the agreed timeframes, where this is not already the case. Next Steps Participants to the EoNs will take forward the recommendations of this six-month review, and will take responsibility for tracking progress. The Home Offie and Foreign and Commonwealth Office will produce a report on their implementation for the next review. It should be noted that this review is in addition to ongoing monitoring of the practical application of the commitment by all participants, and a UK Statutory Review required by the Criminal Finances Act to take place before 1 July 2019 covering the period to the end of 2018. This summary is also available on Gov.UK


This statement has also been made in the House of Lords: 
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Department for Digital, Culture, Media and Sport

Update on media matters

Matt Hancock: On 23 April I confirmed that I had written to Trinity Mirror plc and Northern & Shell Media Group Limited to inform them that I was minded to issue a Public Interest Intervention Notice (PIIN) on the basis that I had concerns that there may be two public interest considerations - as set out in the Enterprise Act 2002 - relevant to consideration of the merger. The first public interest ground is the need for free expression of opinion, and concerns the potential impact the transfer of newspapers would have on editorial decision making. The second public interest ground is the need for a sufficient plurality of views in newspapers, to the extent that it is reasonable or practicable. I invited written representations from the parties by 26 April and, having considered these, I have written to the parties today confirming my decision to issue a Public Interest Intervention Notice (PIIN) on both grounds. This PIIN triggers action for Ofcom to report to me on the media public interest considerations and the CMA on jurisdiction and any competition issues, respectively, by the 31st May 2018. I will then consider whether or not to refer the merger for a more detailed investigation, or whether to accept undertakings-in-lieu of such a reference. The role of the Secretary of State, in this process, is quasi-judicial and procedures are in place to ensure that I act independently and follow a process which is scrupulously fair and impartial.

Update on process - Fox-Sky merger

Matt Hancock: On 23 January I provided an update to the House on the CMA’s interim report on their investigation into the proposed merger between 21st Century Fox Inc and Sky Plc. Today I received the final report from the CMA regarding the findings of their phase 2 investigation. Now that I have received this report, I must come to my decision and publish the report within 30 working days (by 13 June). My decision will be on whether the merger operates or may be expected to operate against the public interest, taking into account the specified public interest considerations of media plurality and genuine commitment to broadcasting standards. When I have reached a decision I will return to Parliament to make an oral statement. I will come to a view on whether to make a final order or accept any final undertakings in due course, and will consult on these publicly, but not before I have taken a decision on the public interest tests. Given my ongoing quasi-judicial role, I will not be making any comment about the substance of the report until I publish my decision.

Department for Work and Pensions

Office for Nuclear Regulation (ONR) Corporate Plan 18/19

Sarah Newton: Later today I will lay before this House the Office for Nuclear Regulation Corporate Plan 2018/19. This document will also be published on the ONR website. I can confirm, in accordance with Schedule 7, Section 25(3) of the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.


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Foreign and Commonwealth Office

Beneficial ownership in the Overseas Territories and Crown Dependencies

Sir Alan Duncan: Illicit financial flows are a global threat to prosperity and the rule of law. The IMF has estimated that money laundering globally represents between 2 and 5% of GDP. This criminal activity facilitates other crimes – including corruption, tax evasion and fraud. Successive Governments have led on this issue by promoting transparency, including through the OECD, G20 and Financial Action Task Force (FATF), and UK-led initiatives such as the 2016 Anti-Corruption Summit. Increasing transparency about who owns companies registered or residing in the UK (beneficial ownership) is part of this agenda. We were the first country in the G20 to establish a public register of company beneficial ownership and - in December of last year - published our Anti-Corruption Strategy covering the period from 2017-2022. The UK is rightly seen as a global leader on this agenda and, last month, Transparency International listed us as one of just three G20 countries with a “very strong” legal framework around beneficial ownership.We recognise the concerns about money laundering and corruption in the Crown Dependencies and Overseas Territories and we are committed to increasing transparency about the companies who operate there. We have worked cooperatively with the Crown Dependencies and Overseas Territories over the last four years, including through entering into the Exchange of Notes in 2016 through which UK law enforcement has near real-time access to beneficial ownership information on companies incorporated in those jurisdictions. This has resulted in tangible benefits to law enforcement; as of February, the Exchange of Notes arrangements have been used over 70 times to provide enhanced law enforcement access to beneficial ownership data. This information has enhanced intelligence leads and investigations on illicit finance. We continue to work closely with the Crown Dependencies and Overseas Territories to further strengthen their approach in this area.At EU-level, the UK went beyond the requirements of the Fourth Anti-Money Laundering Directive in establishing a public register, and supported the inclusion in the Fifth Anti-Money Laundering Directive of a provision that will require all EU Member States to have the legislation in place to establish publicly accessible registers by the end of 2019. Non-EU countries including Afghanistan, Ghana, Nigeria and Ukraine have all either committed to establishing public registers or are in the process of doing so.  Domestically, the UK has committed to create a new register for overseas companies and to pass legislation by 2021. Once in place, overseas companies will not be able to buy property in the UK, or secure UK government contracts, without submitting the necessary beneficial ownership information. We will urge and support other countries to take similar action. Internationally, the UK has been promoting beneficial ownership transparency at relevant international fora – including the G20, FATF and the OECD. The UK is supporting the Open Ownership Register (the global register holding beneficial ownership information) and is working with countries that are committed to using the beneficial ownership data standard. The UK is also supporting the Extractives Industries Transparency Initiative to implement its enhanced standard which requires the collection of beneficial ownership information. The UK has and will continue to offer technical assistance to other nations looking to establish beneficial ownership registers.In 2016 the Overseas Territories and Crown Dependencies agreed the Exchanges of Notes with the UK on the exchange of beneficial ownership information. They have made significant progress in implementing the commitments by introducing legislation and establishing, where they did not already exist, central registers or similarly effective systems. We are continually monitoring the implementation of the arrangements and the latest six-month review demonstrates that these are now in force and delivering benefits to UK law enforcement. They enable UK law enforcement authorities to establish the ultimate owner of companies registered in the Overseas Territories and Crown Dependencies, and strengthen their ability to investigate serious and organised crime, including money laundering and tax evasion. The commitments they have made in the Exchanges of Notes with the UK exceed current Financial Action Task Force standards and put them ahead of most jurisdictions, including many of our G20 partners and some states in the United States. The bilateral arrangements provide for further, annual reviews and the basis for taking further action if required. In addition, there will be a Statutory Review of the arrangements next year, which will ensure Parliamentary scrutiny. It is right that we continue to focus on the effective implementation of these arrangements, rather than imposing new requirements on the territories.Furthermore, I can today confirm that the Government will use its best endeavours, diplomatically and with international partners, including through multilateral fora (such as the G20, FATF and the OECD), to promote public registers of company beneficial ownership as the global standard by 2023.When all of this is put together, it is clear that the UK is the international leader on setting high standards for transparency on beneficial ownership. The Government is committed to influencing others in this regard, including the UK’s Overseas Territories and Crown Dependencies. 


This statement has also been made in the House of Lords: 
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Sanctions and Anti-Money Laundering Bill [Lords] – impact on equalities

Sir Alan Duncan: During the passage of the European Union (Withdrawal) Bill through the House of Commons, the Government committed to providing a statement on the impact of EU-exit primary legislation on either the Equality Act 2006 or the Equality Act 2010. The expectation is that this statement will usually be included in the explanatory notes for the relevant bill. However, as the Sanctions and Anti-Money Laundering Bill [Lords] has already completed its passage through the House of Lords, and has Report and Third Reading in the House of Commons today, the explanatory notes will not be updated again until Royal Assent. I am therefore making this statement now, while the Bill is still before Parliament.I can confirm that the Sanctions and Anti-Money Laundering Bill [Lords] does not amend, repeal or revoke any provision of the Equality Act 2006, the Equality Act 2010 or any subordinate legislation made under either of those Acts (“the equalities legislation”).In relation to the Bill, I have had due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010.


This statement has also been made in the House of Lords: 
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